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The Auto Industry SEC Flu

Location: Blogs AAO Weblog (Public)
Posted by: Jack Ciesielski	10/27/2005 3:25 AM
Same bug, different strain. They all relate to accounting, they relate to the SEC. It's the topics and the players that differ. Almost a year ago, the SEC began investigations into pension and other postemployment benefit plan accounting at General Motors, Ford, Delphi, Boeing, Delphi, and Navistar. It wasn't any announcement by the SEC that clued in the public that such an investigation was going on: it was the disclosures by the players themselves in their public filings. There hasn't been a peep out of the SEC on the matter. Another peep emerged from the disclosures of another filer: DaimlerChrysler. Mary Williams Walsh reported on Wednesday in the New York Times: "...DaimlerChrysler disclosed that the Securities and Exchange Commission had served it with a subpoena in September seeking information in connection with a continuing investigation of General Motors' pension accounting. General Motors is one of six large companies whose pension accounting has been under review by the S.E.C. since October 2004. The others are Ford Motor, Delphi, Boeing, Navistar International and Northwest Airlines. DaimlerChrysler said in a regulatory filing that the S.E.C. was seeking information related to methodology used in calculating pension and other retirement benefits for its North American employees. The S.E.C. said it also wanted to see "communications with G.M., Ford, and/or Delphi regarding such rate or methodology," according to the filing." You can see the actual disclosures in the DaimlerChrysler 6-K, linked here. It's still a puzzle. What did the SEC see in the investigations of the others that made a subpoena of DaimlerChrysler? Were these companies essentially passing around their homework to each other? And if so - was the homework correct? We'll just have to ponder it until either more clues seep out, or someone involved can actually talk about it.

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